Propane stocks dipped another 1.6M/bbls through the week ending March 2nd, according to the recently released EIA report.
Once again, the internals of the report don’t make a lot of sense to me, which has been the case for much of this winter.
Based on waterborne export data we have available to us, we expected propane exports to be close to 1M/bpd. Instead, they were reported at 668,000/bpd. This was more than offset by a domestic demand number of 1.622M/bpd, up from last week’s 1.051M/bpd.
To say that I am skeptical of that demand number would be an understatement, unless petchems or some other variable like that accounted for a good portion. As we all know, temperatures were quite toasty for the final week of February.
Production remains robust, at 1.857M/bpd vs 1.824M/bpd last week.
I want to pause here, as I am finishing a blog post for tomorrow that is going to focus on propane production for the coming spring and summer. I think this will be the biggest factor we need to anticipate and deal with for the coming year pursuant to contracting and market trajectory.
One year ago this week, propane production was at 1.732M/bpd and two years ago this week production was at 1.654M/bpd. Keep this in your mind in anticipation of tomorrow’s post, which I strongly urge you to read when it comes into your inbox.
As for propane price movements, this has been a predictably slow week, with the annual OPIS convention still underway in California, as most industry traders and supply-side staff are at this event.
Regional Inventories: Midwest down 300,000 to 9.9 million; Gulf down 1.2 million to 26.5 million; East flat at 3 million; and West down 100,000 to 1.7 million.
Historical Averages: Midwest is 2.6 million below 2017’s total and 2 million below the 5-year average of 11.9 million. Gulf Coast inventory is 1.1 million below last year and 3.1 million below the 5-year average of 29.6 million. East Coast is 800,000 below 2017 and 400,000 above the 5-year average of 2.6 million.
WEATHER: Current forecasts show some below normal temps for the next ten days, but a return of of warmth in the east towards day 15. This winter began with sizzle, but ended with a fizzle.